What is a Personal Loan

OneMain Financial (formerly Citifinancial) has more than 1,300 local branch offices throughout the U.S. and Canada.

There are many different types of loans available from financial institutions. One type of loan you may be less familiar with is the personal loan. Unlike most loans, personal loans do not require you to provide the lender with something of value that they can keep if you fail to make your loan payments. Personal loans are also known by several other names, including unsecured loans or installment loans.

How do personal loans work? When you arrange a personal loan with a lender, the terms of your loan are fixed and typically do not change during the agreed term of your loan. That means:

  • Your interest rate won’t change.
  • Your monthly payment won’t change.
  • The number of payments needed to repay your personal loan won’t change.

You receive the complete amount of your personal loan by check when your lender approves your application and you complete the needed paperwork. In addition, you can use the money you borrow in any way you choose.

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Our Notes: 1) You may be familiar with payday loans. Payday loans are not personal loans, and because of their short-term nature, the laws and regulations applying to these loans are different. How much they differ, varies on a state by state basis. 2) Personal loans can sometimes be secured, that is, require collateral. When a vehicle is used as collateral, however, this is referred to as a title loan, rather than a personal loan. 3) Not all personal loan lenders operate the same, or make the same types of offers. In addition, their underwriting guidelines (or approval criteria) may vary considerably. Be sure to ask every lender you contact for all of the details of the loan programs that they offer, up front. In other words, request the fine print before you apply. If they are unwilling to provide the information to your satisfaction, leave and visit another company! There are plenty of lenders, banks and credit unions out there willing to compete for the business.

DebtConsolidationLoan.com – Are your credit card debts piling up and getting out of control? Use the menus in the header above to find websites that offer debt management, debt consolidation loans and other forms of help for those with debt problems. Search by the kind of provider or the state in which you reside. In order to view more financial tips, please visit our personal finance index page for a complete list of resources that we have available.

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